Crypto recovery scam cases grow as FBI warns of sophisticated lawyer impersonation

Crypto recovery scams are surging worldwide, with the FBI issuing a stark warning that fraudsters are now posing as lawyers, regulators, and recovery specialists to prey on past victims of digital asset theft.

With elderly losses hitting $2.83B, crypto recovery scams are evolving fast, blending fake law firms, AI deception, and government impersonation.

Crypto recovery scams are on the rise, and the FBI has issued an urgent warning to cryptocurrency users worldwide.

The bureau reports that scammers are now posing as lawyers and government officials to target people who have already fallen victim to previous crypto fraud schemes — a cruel twist that exploits both emotional and financial desperation.

In its latest alert, the FBI revealed that these crypto recovery scams have become alarmingly sophisticated, often targeting elderly victims, who lost a staggering $2.83 billion in 2024 alone — almost 30% of total reported crypto fraud damages.

This follows a 66% surge in overall crypto fraud losses, which jumped from $5.6 billion in 2023 to $9.3 billion in 2024.

FBI says fake law firms are exploiting previous victims

According to the updated FBI advisory, fraudsters are creating fictitious law firms and impersonating legitimate attorneys, complete with forged letterheads, legal documents, and even fabricated government affiliations.

“They claim to be working in partnership with U.S. agencies or foreign regulatory bodies, but in reality, no law firm has such authorization,” the FBI stated in its bulletin.

These crypto recovery scams are especially dangerous because scammers often have detailed knowledge of victims’ previous wire transfers — including amounts and dates — making their offers seem more credible.

Victims are told they’re on an official “recovery list” and that their stolen funds can be returned through legal channels. The scam then directs them to register with foreign banks via convincing but fraudulent websites.

Once engaged, victims are placed in WhatsApp group chats with so-called bank “processors” and “attorneys,” who demand fees for identity verification. These fees are often requested in cryptocurrency or prepaid gift cards, ensuring anonymity.

“Assume every unsolicited message is a potential attack,” advised Navin Gupta, CEO of Crystal Blockchain Analytics, in an interview with CryptoNews. “That mental shift alone filters out 80% of threat vectors.”

AI makes scammers more dangerous

Gupta warned that crypto recovery scams are now leveraging artificial intelligence to craft hyper-personalized attacks based on leaked personal data.

AI tools allow scammers to convincingly mimic official communication styles, even replicating writing patterns from legitimate firms.

“Urgency, secrecy, and flattery — these are the psychological levers scammers pull. Even the most advanced cybersecurity tools can’t defend against human manipulation without awareness,” Gupta said.

Investment fraud still leads crypto crime

While crypto recovery scams are growing fast, investment fraud — particularly “pig butchering” schemes — remains the largest category of crypto crime.

Data from Chainalysis shows these scams have increased 85-fold since 2020, with individual victims often losing between $2 million and $4 million.

The FBI says it managed to notify 4,323 cryptocurrency investment fraud victims, saving an estimated $285 million.

However, the human toll is immense: 42 victims required suicide intervention referrals due to devastating losses.

California leads the U.S. in crypto fraud losses with over $1.39 billion, followed by Texas at $738 million.

The danger isn’t just to individuals. Organized criminal networks, including state-sponsored hackers, are scaling operations.

In 2024, North Korean hackers stole $1.34 billion from crypto platforms, rivaling the $1.4 billion Bybit hack earlier this year.

Ransomware incidents also rose by 9% in 2023, with over 5,400 victims notified between January 2024 and April 2025 — many completely unaware of active targeting attempts.

FBI’s advice: Trust no one by default

The FBI urges crypto holders to adopt a “zero trust” approach, echoing Gupta’s recommendations. Before engaging with anyone offering recovery services:

• Request video verification of the person’s identity.

• Demand law license documentation and check with state bar associations.

• Verify government employment claims through official agency directories.

• Avoid paying in cryptocurrency or gift cards for recovery services.

“Scammers thrive on urgency. Slow the process down, verify every claim, and never share personal details without confirmed legitimacy,” the FBI emphasized.